Energy Tomorrow Blog
Posted September 9, 2015
API has a pair of new ads that drive home the economic and national security reasons for lifting America’s 1970s-era ban on exporting domestic crude oil.
The television and online campaign launched this week in a dozen states – including Colorado, Florida, Illinois, Pennsylvania and Virginia – and the District of Columbia. The campaign is part of a broader push emphasizing the importance of updating U.S. energy policies to reflect America’s rise as a global energy superpower.
Posted August 14, 2015
We’ve put up a number of posts recently that argue for lifting the United States’ decades-old ban on exporting domestic crude oil – citing sound economic, trade and security reasons. Underlying them all is this: As an energy superpower, America will see more benefits here at home, be more secure and help make the world safer if U.S. crude is allowed to trade freely in the global marketplace.
Now, there is a compelling, market reason for urgency in ending the export ban – a self-sanctioning relic of the 1970s that hinders U.S. global competitiveness while impeding domestic energy development and economic growth. That would be the impacts on global crude markets if/when Iran resumes exporting oil under the proposed nuclear agreement the White House is advancing.
Posted August 12, 2015
Add MIT professor and former CIA director John Deutch to the bipartisan list of those calling for an end to the ban on U.S. crude oil exports.
Deutch, a National Petroleum Council member who served in a number of posts during the Carter, Clinton and Obama administrations, argues in the Wall Street Journal that exporting domestic crude would grow U.S. jobs and increase American influence in world oil markets. Deutch writes:
The bottom line is that the U.S. has the potential to export large amounts of oil and refined products.
Posted August 11, 2015
The U.S. Commerce Department’s recent mid-year trade report illustrates how surging domestic oil and natural gas production is helping our economy – and strongly suggests what increased domestic output could do if U.S. crude oil and liquefied natural gas (LNG) had unhindered access to global markets.
According to Commerce, the U.S. trade deficit among petroleum and petroleum products fell 56.1 percent the first six months of this year compared to the first six months of 2014 (exhibit 9). That growth helped hold the total U.S. year-over-year trade balance steady, even as the trade deficit in non-petroleum products increased 23.1 percent. API Chief Economist John Felmy:
“Despite a very competitive global market, the U.S. energy revolution continues to push our trade balance in a positive direction. Oil imports remain on the decline, and strong exports of petroleum and refined products are creating new opportunities for America to bring wealth and jobs back to U.S. shores.”
For that trend to continue, though, the United States must pursue energy trading opportunities with the same vigor it pursues trade in other areas. A 1970s-era ban on crude oil exports should be lifted, and LNG export projects should be approved by the government so that domestic producers have every chance to access global markets.
Posted August 4, 2015
Something we hear frequently (and too often from people who should know better), is that as long as the United States is an oil importer it shouldn’t export domestic crude. It sounds logical and certainly makes for a good headline. But the idea ignores reality and sound economic analysis.
A quick skim of government data on U.S. trade shows that goods imported into the United States are often goods that also are exported from the United States. The fact is that oil is traded globally, and the ebbs and flows of global supply affect us here in the U.S. Bruce Everett, who teaches oil market economics at Tufts University, explained in a recent article for Politico:
… it’s certainly true that the US will still require imported oil for the foreseeable future to meet our needs. But the implication here is that exporting US crude oil would increase our import needs and therefore undermine national security. And that’s not how the oil market works. The US has an open economy, and American consumers pay world prices for oil – just as they do for wheat, corn, copper, gold and other internationally traded commodities. Crude oil is sold in a single, integrated global market. If the world oil price spikes, the US will suffer, along with everyone else, to the extent we rely on the global market for imports. But exporting some domestically produced oil would not affect this equation.
Energy isolationism isn’t in the United States’ best interest – economically or from a security standpoint. While some argue that shutting in U.S. crude oil is better for America, that kind of faulty thinking ignores the way free markets work – and can work to America’s benefit if we lift the ban on exporting domestic crude.
Posted July 29, 2015
The current crude oil export debate basically is about global competition – and whether the United States will stop sanctioning itself and let an American commodity trade freely on the global market.
An irony – we’ll call it the “Iran Irony” – underscores the anti-competitive nature of our outdated ban on oil exports and the strategic shortsightedness of maintaining it.
The “Iran Irony” is this: While the U.S. advances a nuclear deal that would let Iran reemerge as a major oil supplier on the global market – to Iran’s economic and competitive gain – the United States denies itself similar benefits by banning its own crude exports. This is hurting America’s global competitiveness, diminishing the potential positive impacts of America’s rise as an energy superpower.
Posted July 23, 2015
At an event last month, API President and CEO Jack Gerard sketched the broad outlines for a national conversation on energy, connecting energy policy with the approaching 2016 elections. It’s an appropriate linkage.
Our country has become a global energy superpower thanks largely to private innovation and entrepreneurship, which have created a generational opportunity – “the American moment,” Gerard called it. Sustaining the energy revolution requires vision, right policies and action – and the right leadership, which is why the 2016 vote matters. The energy path to help spur economic growth and prosperity and to increase national security is one that should transcend party politics.
Posted July 10, 2015
Here’s one takeaway from IHS’ new research report on Canadian oil sands: Thank goodness for Canada and its oil sands.
Along with our own domestic energy renaissance, oil sands imports from our northern neighbor and ally are growing America’s energy security. Oil sands crude is critically important now and will be into the future, IHS says – which is why we here in the United States should be ever so grateful for our energy partnership with Canada and attentive to ways that relationship can be strengthened.
Yes, that’s a reference to the long-languishing Keystone XL pipeline. If we’re serious about oil sands development – and IHS’ report strongly suggests Americans should be – then we should quit politicking to death the single biggest infrastructure project at hand that would facilitate oil sands transportation to the U.S.
Posted July 6, 2015
Another sign of the times on the Keystone XL pipeline: South Dakota’s Public Utilities Commission (PUC) is weighing pipeline builder TransCanada’s request for a reissued construction permit because the company’s original permit died of old age – victimized by the White House’s failure to decide on Keystone XL despite nearly seven years of review.
That’s right. TransCanada’s first construction permit for the 314 miles of the pipeline that would cross South Dakota expired last summer. You could say the cause of death was neglect – neglect by the White House, with its Keystone XL review approaching the seven-year mark this fall.
So, TransCanada seeks a reissued permit. The PUC is scheduled to hold a public input session Monday night, followed by evidentiary hearings July 27 and Aug. 4.
A couple of points. The first is to underscore again the absurd and unfair way the White House has kept Keystone XL in suspended animation, causing a state construction permit that’s good for four years to lapse. The second is to point out that the economic and energy merits of building Keystone XL – for South Dakota and the U.S. – remain unchanged, basically unchallenged by pipeline opponents.
Posted July 3, 2015
What makes you happy? Good health? A pleasing career, your family’s well-being, realizing dreams? There are many things we could list that lead to happiness. One of the glories of America is that it’s up to us as individuals to choose – the search for happiness being fundamental to what it means to be an American.